Lenovo faces tough task to bring back glory days after sales slump, 5G controversy

By Li Qiaoyi Source:Global Times Published: 2018/6/10 20:18:40

Photo: Li Qiaoyi/GT

Chinese PC giant Lenovo took the wraps off its new flagship smartphone model last week. It came after a turbulent month, in which the Hong Kong-listed company lost its place on the Hang Seng Index. Lenovo was also hit by allegations that it voted in favor of US firm Qualcomm and against domestic firm Huawei in meetings in 2016 about standards for new 5G services.

But the company has high hopes for its new phone, which boasts an impressive combination of high functionality and a relatively low price. However, whether the model can revitalize Lenovo's faltering mobile business remains to be seen.

Starting at 1,299 yuan ($203.24), the 6.2-inch Z5 model achieves an almost full-screen look, and matches much pricier peers in terms of functionality. The phone and two new budget models could offer a ray of hope for the company, which recently restructured the division in charge of its smart devices.

The new gadgets could well bring Lenovo back to smartphone users' attention, as Chinese consumers are becoming more rational when it comes to smartphone selection and are also increasingly interested in more affordable but quality products.

Reservations on JD.com for the Z5, which is slated to hit the shelves on Tuesday, totaled more than 310,000 as of Sunday. The number is encouraging for Lenovo, which only sold 1.8 million smartphones in the whole of 2017 in China, according to data from market research firm GfK.

But it will only be the first step in a long journey. China's smartphone market is approaching maturity and is firmly dominated by Apple and four other Chinese phone vendors - Huawei, Oppo, Vivo and Xiaomi.

Lenovo ranked 10th in the Chinese smartphone sales rankings last year, according to GfK figures, while Huawei ranked first, with sales of 102.6 million, or 23 percent of the country's total sales.

Lenovo held the second position in the country's smartphone market back in 2012. But sales suffered due to frequent management reshuffles and slow responsiveness to the phone market and the move toward a focus on user experience and an internet-based mentality in product design and marketing. And Lenovo's $2.9 billion acquisition of Motorola Mobility in 2014, its biggest deal, did little for the company's performance in its home market.

So Lenovo will have a tough task to rebuild its phone brand. Chang Cheng - previously a noted product manager at Lenovo who has been newly appointed as the head of the company's mobile business for China - said in an interview last week after the Z5 launch event that "whether we can survive or not" is uncertain. But he expressed resolve to make Lenovo phones a top national brand again.

Sometimes fearless ants really can scare elephants. If the new model turns out to be a truly big hit, which means sales of about 10 million units, Lenovo could yet turn back into an elephant.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

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